OTTAWA — Canadian insolvency filings hit a 20-year low last year as government financial support offset the shock and economic uncertainty caused by COVID-19.
The Office of the Superintendent of Bankruptcy says there were 99,244 consumer bankruptcies and proposals along with business bankruptcies in 2020, down 30 per cent from the prior year.
Total insolvencies plunged almost 40 per cent from the peak in 2009, with consumer insolvencies down 30 per cent from 2019 to an 18-year-low.
Consumer filings decreased 33.5 per cent in the fourth quarter.
All provinces registered lower consumer filings in 2020, with Prince Edward Island leading with a 43.1 per cent decrease while Manitoba had the smallest decrease at 19.7 per cent.
Business insolvencies fell 24 per cent to reach their lowest level since tracking began in 1987.
Arts, entertainment and recreation, as well as management of companies and enterprises had the largest increase in insolvencies, while construction and manufacturing had the largest declines.
“These historic low insolvency filings reflect the government aid programs that have kept many individuals and businesses afloat despite the significant financial distress caused by the pandemic,” says Mark Rosen, chair of the Canadian Association of Insolvency and Restructuring Professionals.
“What we can’t see in the insolvency data yet is how things will change as the taps are turned off.”